SentimenTrader Blog

2019-04-20 | Jason Goepfert | Lite

Health care’s bad weekHealth care stocks have gotten hit, and it’s erased their year-to-date gain, while the S&P 500 has held up. The divergence between the two this far into a year is unusual.Other times health care underperformed by more than 5% through this many sessions into a year, it led to mixed returns for the rest of the year, both on an absolute basis and relative to the S&P 500.Widespread sellingThe selling in health care stocks has been widespread. Four different breadth metrics ...


2019-04-18 | Jason Goepfert | Daily Report

Health care stocks have underperformed the S&P 500 through mid-April by a near-record degree, and other times it underperformed led to mixed absolute and relative returns; The selling was enough to trigger a number of breadth extremes in health care stocks; Active money managers are aggressively exposed; Unleaded gas has high optimism

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2019-04-18 | Jason Goepfert | Premium

Here's what's piquing my interest so far on this pre-holiday Mueller-fest.DamagedThe carnage in health care stocks over the past few days has generated some interesting readings in the breadth metrics. The move was swift and severe enough that more than 60% of stocks in the sector closed below their lower Bollinger Bands.Nearly 80% of them broke down out of their month-long ranges.As a result, nearly 40% of the stocks are now oversold.The impulse has been strong enough that the McClellan ...

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2019-04-18 | Jason Goepfert | Lite

Cyclical reboundCyclical stocks got hit hard late last year, especially relative to defensive stocks. They’ve made an impressive rebound. The rate of change on the ratio of cyclical to defensive stocks has cycled from an extreme low to an extreme high.Over the past 20 years, a cycle like this has led to mean-reversion the few other times it happened to this degree, with defensive stocks outperforming by a significant degree.Tech breakoutWhile buyers didn’t seem interested in chasing the ...


2019-04-17 | Jason Goepfert | Daily Report

The ratio of cyclical to defensive sectors has cycled from an extremely low rate of change to extremely high one; The Nasdaq 100 exceeded its prior high intraday by more than 0.5%; SPY hit a new high then reversed below the last 4 closes; The Optimism Index on the XLV health care fund plunged to 2.

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2019-04-17 | Jason Goepfert | Premium

Here's what's piquing my interest so far on yet another potential reversal day.BreakoutEven if the rally in tech fades, on an intraday basis the Nasdaq 100 has bested its prior multi-year high by at least 0.5%. The most bullish aspects about this market aren't fundamental, and they're certainly not sentiment-related, but price action has been pristine and it's been hard to find that kind of action.It's been good for the S&P 500 as well. Which is somewhere between hard and impossible to fully ...

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2019-04-17 | Jason Goepfert | Lite

Maximum optimismDumb Money Confidence has been climbing steadily for a month, and stocks have so far shrugged off that extreme optimism. Now it has reached its highest level in a decade.Every date that saw this high of a reading in the past 20 years sported a negative return in the S&P 500 at some point between the next 2-8 weeks.This is also one of the handful of times since 1999 when Dumb Money was highly confident about a market rally two weeks into an earnings reporting month. All of ...


2019-04-16 | Jason Goepfert | Daily Report

Dumb Money Confidence has soared to 85%, its highest level in nearly a decade, and one of the highest in 20 years; it's also high for this far into an earnings reporting season; The semiconductor sector has almost erased a nearly 30% loss in less than 6 months; The Shanghai McClellan Oscillator is oversold; XLV health care optimism is very low

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2019-04-16 | Jason Goepfert | Study

As noted in the Daily Report, Dumb Money Confidence has soared to its highest level in almost a decade. It's also extremely high for being a couple of weeks into the earnings reporting season.Both studies have led to consistently poor returns for stocks in the weeks and months ahead, so we're pulling them out and including them as an Active Study.

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2019-04-16 | Jason Goepfert | Premium

Here's what's piquing my interest so far today.Super ConfidentDumb Money Confidence has entered a "super extreme" phase. In the 20 year history of the model, only two distinct time periods can compare - the recoveries from the last two major bear markets. That was a good long-term sign of returning risk appetite, but in the short- to medium-term, it was hard for buyers to sustain this kind of enthusiasm.Economic DivergenceQuite a few people have pointed out the odd divergence we're seeing ...

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